How do you differentiate your property from others in your area?

Reply to the comment left by "Ed Atkinson" at "07/09/2013 - 11:04":

Hi Ed

I also wish that Rightmove and Zoopla would force all agents to list their fees as there may be two identical properties next door to each other, both priced at the same rent but one landlord/agent charges tenants no fees and the other charges £500. If ALL prices were recorded then tenants could make better informed decisions. For example, if the property with no fees was £50 a month cheaper on rent that the one next door with £500 letting fees a tenant could make an informed choice and may well decide to go for the one with the fees on the basis that they would be up £50 a month after month 10.

Now here's a conundrum for you. Just suppose a letting agent said that he would advertise your properties on Rightmove for you for £1 on the basis that:-

a) he charged your tenants £89 each for professional referencing
or
b) he charged you an extra £100 if you took the tenants without using him to reference them.

My questions are:-

1) Would you use that letting agent?
and
2) If you would, which scheme would you go for?

If you are in Scotland then the choice would already be made for you as letting agents can't charge fees to tenants.

This service might well be available to self managing landlords in the very near future, hence the question. The letting agent only does advertising and referencing, NOTHING else. It will only be for self managing landlords as they don't do viewings, tenancy agreements, inventories, check in/out, deposit protection etc.

It's actually my brothers business which is looking into this. He manages our entire family portfolio and has accounts with Rightmove and Zoopla for advertising. He also has a Joint Venture with FCC Paragon for referencing and another product they are planning to launch together but that's another story.
.

Reply to the comment left by "Mark Alexander" at "07/09/2013 - 11:55":

Answ 1 - no (I assume you include the Credit Check). Two reasons: if 2 tenants that's £179 charged (£89 * 2 plus £1) and my current costs for that would be about £75. Here I assume that the tenants are aware of the fee when deciding to rent and so a slight increase in rent would be possible if no fees were charged to tenants. I.e. I make no distinction between a fee I pay and one the tenants pay. The other reason is we see referencing as something we need to do ourselves, we listen for that telling pause etc or a laboured tone .. it's the feel we get for the tenants from referencing, in contrast to the NLA Tenant Check which is more 'forensic'.

Answ 2 - the extra £100 and no referencing option.

"I also wish that Rightmove and Zoopla would force all agents to list their fees ......" YES do you fancy this as a campaign? I see now that Rightmove does officially allow publicising tenant fees at least, if not forcing it. They stipulate that data for ads "does not include details of Your commission, fees (except tenant and buyer fees)..., " That's from:

http://www.rightmove.co.uk/ps/pdf/p/help/Core_TsandCs.pdf

Can we take it a stage further to compulsory tenant fees?

Cheers, Ed

Reply to the comment left by "Ed Atkinson" at "07/09/2013 - 13:48":

Hi Ed

I believe there was a Court case not so long ago which means that the likes of Rightmove and Zoopla will be compelled to force agents to disclose their fees. The sooner the better so far as I am concerned.

Just to make it clear, my other questions do not relate to a business in which I am a shareholder. I do, however, own shares in another letting agency which is not owned by my family. Before you ask, Yes, it's like treading on eggshells sometimes! The family business manages my properties, I own shares in another letting agency and I am a non-exec Director in both. However, believe it or not, they don't compete as one is focussed on full management for clients needing that service and the other only manages my family portfolio and does advertising and referencing only for other landlords who prefer to self manage.

When you read my strategy you will see that I use a combination of what I refer to as "soft referencing" and formal referencing.

Soft referencing includes:-

1) Meeting the tenants in their own home
2) Reviewing bank statements
3) Taking copies of passport and proof of current address and taking copies

Formal referencing includes:-

1) Credit history check (which will highlight any CCJ’s & bankruptcies),
2) Voters roll confirmation
3) Locate information (which may reveal undisclosed addresses which can then be searched)
4) FCC Paragon tenants database check - as FCC Paragon are one of the UK's largest tenant referencing agencies and underwriters of Rental warranties they have a huge database of tenants which they know have previously cauised aggro to former landlords. A cross check against this datrabase is incredibly valuable.
5) Managing agent/landlords reference/s (both current and previous if applicable)
6) Income reference/s (regardless of whether employed, self-employed, retired)

I suspected that you would say the £101 option would suit you better from your previous comments. It will be interesting to see how that works out in the stats as most landlords I've discussed this with so far go the other way on the basis that they can let a property for a £1 and that tenants are so used to having to pay fees that they will see £89 as being extremely competitive to fees charged by other agencies anyway. The other point is that formal referencing is far more robust than a credit check. As you probably know, most landlords do absolutely no soft referencing whatsoever. Also, without formal referencing it is impossible to purchase RGI which is particularly attractive to smaller landlords. The JV my brother is doing with FCC Paragon is a guaranteed rent collection product priced at 5%. It's exclusively underwritten and managed by FCC Paragon and basically guarantees to pay the rent of the due date whether the tenant pays or not. The product also includes the funding of all costs associated with recovery of possession in the event of a tenant defaulting, during which time the rent continues to get paid to the landlord until possession is obtained. I think that could be a real winner with a lot of landlords too as it removes the majority of risks associated with self management and rent collection/cashflow.

Anyhow, we are way off topic now - SORRY KIRSTY.

Reply to the comment left by "Mark Alexander" at "07/09/2013 - 14:11":

Thanks Mark, helpful

Our NLA and phoning references process includes all of your Formal referencing with the key exception of the FCC Paragon tenants database check. I'll be looking into that.

Does anyone out there have more info on the court case and timetable for when agents must disclose fees?

Cheers

Ed

(I'll be quiet now for a bit - offline camping by the river)

Reply to the comment left by "Ed Atkinson" at "07/09/2013 - 14:35":

Does the NLA referencing have a pass/fail which automatically qualifies for RGI too then?

I will ask my brother and the other letting agency I'm a shareholder in to ask Rightmove and Zoopla about the Court case and the timescales. Could be interesting info for an article in it's own right too.

The NLA has a Rent Guarantee Insurance for which the tenant or their guarantor must have passed a full NLA Tenant Check. The NLA Full Tenant Check combines the results of the Basic Tenant Check with:

References obtained from employer (including income confirmation)
References obtained from previous landlord (or letting agent)
Confirmation of previous property ownership
Confirmation of bank account details

We just use the basic check and do the rest ourselves so we would not be able to obtain RGI even from the NLA. Latest prices are £8.95 basic, £24.50 full.

Thanks for the potential new article - I'll be looking out for it.

Cheers, Ed

Reply to the comment left by "Mark Alexander" at "06/09/2013 - 12:42":

yep great points...it's the little things

Reply to the comment left by "lauren field" at "06/09/2013 - 12:45":

brilliant ideas thanks